While this morning’s headline Payrolls report came in stronger than expected at 216k jobs added (Wall Street’s consensus estimate= 175k), which is stronger than the estimates of 65 of 67 Wall Street estimates that made up the consensus view, if you dig into the report (which most of Wall Street doesn’t do, they just go with the headline number), you find some disturbing elements and trends.
First, as has been the trend, the prior 2 Payroll reports were revised lower in this morning’s Jobs report.
- October revised down 45K from 150K to 105K
- November revised down 26K from 199K to 173K
Since January 2023 every single month (except July) has been subsequently been revised lower… 10 of the last 11 months of Payrolls all revised lower, and some, very meaningfully revised lower. Just look at October’s revision to just 105k! It’s almost as if…. Well you fill in the blank. The trend speaks or itself.
What you might not have caught is that FULL-TIME WORKERS DROPPED BY 1.5 MILLION IN A SINGLE MONTH!
This is the biggest drop in full time workers since the Covid lockdown shuttered the U.S. economy.
So how does the Jobs report come in stronger than expected?
Part-time workers jumped by 762,000 in one month. Multiple Job Holders surged to an all-time high of 8.565 million. More and more workers (and I can’t even say “Americans” as you’ll see below) are having to work multiple part-time jobs to make ends meet. Yet we get a Payrolls report that BEATS the vast majority of Wall Street estimates and gives the impression that the U.S. economy is strong.
More on Part Time Jobs… which count as “Jobs Added” in the BLS Payrolls report. Doing the math, lots and lots of part time jobs (many are multiple part-time job holders) have been added. If you substract the number of full-time jobs, a disturbing trend emerges. Since February of 2023, in aggregate the U.S. has lost 34,000 full time jobs. Or said differently, while many part time jobs have been added, in aggregate, not a single full-time job has been added since February of 2023.
In December the number of part-time workers jumped by 762,000, the second highest monthly increase since the Covid lockdowns, to 27.794 million, the highest number of part-time workers since March 2018. And Americans are having to work multiple part time jobs to try to make ends meet. In fact, the number of Americans working multiple pat time jobs has never been higher.
One individual who found three part-time jobs in December, is counted in the Establishment Survey as 3 new jobs added! Visually, it looks like this…
The headline number that Wall Street pays attention to is called the “Establishment Survey”. The Establishment Survey has long diverged from the much weaker Household Survey (as in phone calls asking people their employment status). The Household Survey saw the number of employed workers drop by 685,000! That’s the largest decline in employed workers since the economy was shut down during Covid!
Here you can see the difference between the Establishment and Household surveys…
The Establishment is in green, the Household is in blue and to the far left is when the U.S. economy was shuttered during the Covid lockdown.
And there’s more typical BLS trickery at play. According to the Payrolls report, Average Hourly Earnings rose +4.1%, but the only reason why is because hours worked collapsed to 34.3 hours week, making the hourly average earrings appear higher.
If you are following the crisis at the southern border and wondering why an administration would allow illegal immigrants to pour over the border to the point that even sanctuary cities are starting to say, “Enough is enough!”, then this next graphic may, in part, explain why…
It’s pretty sad that a supposedly non-partisan government agency, which has the manpower and the data to break down the true state of the labor market and make it easy to understand for the average American investor, instead comes out with a deceiving headline number that gives an incomplete at best, if not outright deceiving picture of the state of employment.